diff --git a/launcher-package/citest2/Hello.scala b/launcher-package/citest2/Hello.scala
new file mode 100644
index 000000000..3bf84fbea
--- /dev/null
+++ b/launcher-package/citest2/Hello.scala
@@ -0,0 +1,7 @@
+package foo
+
+object Hello {
+  def main(args: Array[String]): Unit = {
+    println("hello")
+  }
+}
diff --git a/launcher-package/citest2/build.sbt b/launcher-package/citest2/build.sbt
new file mode 100644
index 000000000..1d0e30aad
--- /dev/null
+++ b/launcher-package/citest2/build.sbt
@@ -0,0 +1,5 @@
+lazy val root = (project in file("."))
+  .settings(
+    scalaVersion := "3.8.1",
+    name := "Hello",
+  )
diff --git a/launcher-package/citest2/project/build.properties b/launcher-package/citest2/project/build.properties
new file mode 100644
index 000000000..17c7b092a
--- /dev/null
+++ b/launcher-package/citest2/project/build.properties
@@ -0,0 +1 @@
+sbt.version=2.0.0-RC8
diff --git a/launcher-package/citest2/src/test/scala/HelloTest.scala b/launcher-package/citest2/src/test/scala/HelloTest.scala
new file mode 100644
index 000000000..863715d84
--- /dev/null
+++ b/launcher-package/citest2/src/test/scala/HelloTest.scala
@@ -0,0 +1,7 @@
+import verify._
+
+object HelloTest extends BasicTestSuite {
+  test("addition") {
+    assert(2 == 1 + 1)
+  }
+}
diff --git a/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala b/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala
index a570dc47b..5902615a4 100644
--- a/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala
+++ b/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala
@@ -113,11 +113,21 @@ object RunnerScriptTest extends verify.BasicTestSuite with ShellScriptUtil:
       if (isWindows) cancel("Test not supported on windows")
       else assert(out.contains[String]("-Dsbt.ivy.home=/ivy/dir"))
 
-  testOutput("sbt --script-version should print sbtVersion")("--script-version"):
-    (out: List[String]) =>
-      val expectedVersion = "^" + ExtendedRunnerTest.versionRegEx + "$"
-      assert(out.mkString(System.lineSeparator()).trim.matches(expectedVersion))
-      ()
+  testOutput(
+    "sbt --script-version should print sbtVersion (sbt 1.x project)",
+    citestVariant = "citest",
+  )("--script-version"): (out: List[String]) =>
+    val expectedVersion = "^" + ExtendedRunnerTest.versionRegEx + "$"
+    assert(out.mkString(System.lineSeparator()).trim.matches(expectedVersion))
+    ()
+
+  testOutput(
+    "sbt --script-version should print sbtVersion (sbt 2.x project)",
+    citestVariant = "citest2",
+  )("--script-version"): (out: List[String]) =>
+    val expectedVersion = "^" + ExtendedRunnerTest.versionRegEx + "$"
+    assert(out.mkString(System.lineSeparator()).trim.matches(expectedVersion))
+    ()
 
   testOutput("--sbt-cache")("--sbt-cache", "./cachePath"): (out: List[String]) =>
     assert(out.contains[String]("-Dsbt.global.localcache=./cachePath"))
diff --git a/launcher-package/integration-test/src/test/scala/ShellScriptUtil.scala b/launcher-package/integration-test/src/test/scala/ShellScriptUtil.scala
index 04bdb3e71..22de0f5a3 100644
--- a/launcher-package/integration-test/src/test/scala/ShellScriptUtil.scala
+++ b/launcher-package/integration-test/src/test/scala/ShellScriptUtil.scala
@@ -39,6 +39,7 @@ trait ShellScriptUtil extends BasicTestSuite {
       machineSbtoptsContents: String = "",
       jvmoptsFileContents: String = "",
       windowsSupport: Boolean = true,
+      citestVariant: String = "citest",
   )(args: String*)(f: List[String] => Any) =
     if !windowsSupport && isWindows then
       test(name):
@@ -46,7 +47,7 @@ trait ShellScriptUtil extends BasicTestSuite {
     else
       test(name) {
         val workingDirectory = Files.createTempDirectory("sbt-launcher-package-test").toFile
-        val citestDir = new File("launcher-package/citest")
+        val citestDir = new File("launcher-package", citestVariant)
         // Clean target directory if it exists to avoid copying temporary files that may be deleted during copy
         val targetDir = new File(citestDir, "target")
         if (targetDir.exists()) {
diff --git a/sbt b/sbt
index b32649048..308826604 100755
--- a/sbt
+++ b/sbt
@@ -570,8 +570,6 @@ run() {
   detect_working_directory
   if [[ $print_sbt_version ]]; then
     execRunner "$java_cmd" -jar "$sbt_jar" "sbtVersion" | tail -1 | sed -e 's/\[info\]//g'
-  elif [[ $print_sbt_script_version ]]; then
-    echo "$init_sbt_version"
   elif [[ $print_version ]]; then
     if [[ -n "$is_this_dir_sbt" ]]; then
       execRunner "$java_cmd" -jar "$sbt_jar" "sbtVersion" | tail -1 | sed -e 's/\[info\]/sbt version in this project:/g'
@@ -905,6 +903,12 @@ args1=( "${cli_options[@]}" "${cli_commands[@]}" "${sbt_additional_commands[@]}"
 process_args "${args1[@]}"
 vlog "[sbt_options] $(declare -p sbt_options)"
 
+# Handle --script-version before native client so it works on sbt 2.x project dirs (#8711)
+if [[ $print_sbt_script_version ]]; then
+  echo "$init_sbt_version"
+  exit 0
+fi
+
 if [[ "$(isRunNativeClient)" == "true" ]]; then
   set -- "${residual_args[@]}"
   argumentCount=$#